First wave of local enterprise partnerships as government green lights local growth

This news article was published under
the 2010 to 2015 Conservative and Liberal Democrat coalition government

Local councils and local business will take charge of the local economy as the first 24 local enterprise partnerships have been given the go…

Local councils and local business will take charge of the local economy as the first 24 local enterprise partnerships have been given the go-ahead, by Local Government Secretary Eric Pickles and Business Secretary Vince Cable, to drive growth and create jobs.

In a landmark move the first successful partnerships will see business and councils deliver a new local dynamism that will encourage economic growth and protect business (see link to map).

The Government is determined to rebalance the economy and promote sustainable economic growth fairly across the country, and away from the arbitrary regional boundaries that were used previously. Local Enterprise Partnerships will mean that the people who know their area best will be calling the shots.

New proposals were also unveiled for councils to keep the business rates they collect locally, giving councils a renewed incentive to grow their economy and attract business to the area.

In a third measure Ministers declared today the £1.4bn Regional Growth Fund open for business. The fund will particularly support communities currently dependent on the public sector, helping them make the transition to private sector led growth and prosperity.

Our vision for local enterprise partnerships will help transform the economic geography of the country by creating a new local dynamism that will encourage economic growth and protect business with proper local accountability.

Communities Secretary, Eric Pickles said:

Over the last decade, the country’s economy became skewed by artificial boundaries and top-down prescription that did not work. We want to create a fairer and more balanced economy driven by private sector strength, and our plan for local growth will create local enterprise partnerships, reform the planning system and introduce development incentives for local authorities, like allowing them to keep their business rates, so all parts of the country benefit.

I am delighted that we can announce today the first 24 local enterprise partnerships to be given the go ahead. Our vision for local enterprise partnerships will help transform the economic geography of the country by creating a new local dynamism that will encourage economic growth and protect business with proper local accountability.

Speaking to the Local Government Association today, Decentralisation Minister Greg Clark added:

The partnerships going ahead today are a testament to local ambition and ingenuity, and proof that central government does not to micromanage. The potential for Local Enterprise Partnerships is unlimited and any area can come forward with proposals if they suit business and community aspirations.

The radical proposals to look at ways for Local Authorities to keep the business rates they collect locally would reduce central redistribution. However, the Government is clear any change must be to encourage growth and not lead to an increased tax burden on business.

Under the current system over £20bn of business rates collected by councils are pooled by central government and redistributed across all local authorities. The result is that councils have a vital role supporting the local economy but the cash return for doing so is limited. The plans to localise the business rates would introduce genuine incentives for local economic growth.

By giving councils the ability to retain the money they raise in business rates, councils will have a more direct stake in the future of their own economies and access to funding to deliver the services their communities need.

Eric Pickles added:

We want every community to be open for business and every community to share in the benefits of economic growth. We intend to radically change the way local business taxes are allocated.

By scaling back central government’s control and redistribution of this local business tax it will give them a genuine financial stake in their economy so local policy makers actively encourage growth and new businesses in their area.

These announcements were included in the White Paper on Local Growth published today, which sets out the Government’s new approach to rebalance the economy and drive sustainable growth by focusing on three key themes:

shifting power to local communities and businesses - by establishing dynamic local enterprise partnerships of local business and civic leaders, operating within an area that makes economic sense, which can provide the vision, knowledge and strategic leadership to set local priorities and empower communities to fulfil their potential

increasing confidence to invest - by creating the right conditions for growth through a consistent and efficient framework for investment, an effective planning framework and new incentives to make sure local communities benefit from development

focused investment - by tackling barriers to growth that the market will not address itself and supporting investment that will have a long term impact on growth

The first 24 local enterprise partnerships are:

Birmingham and Solihull with East Staffordshire, Lichfield and Tamworth